LONDON: TV advertising generates the highest return on investment (ROI) of any media over both the short-term and long-term, according to independent analysis carried out for Thinkbox, the marketing body for commercial TV in the UK.
The study was carried out by marketing analysts at Ebiquity and Gain Theory, who evaluated more than 2,000 ad campaigns across 11 categories going back to 2014.
Thinkbox said the research was the first of its kind because it quantified the total profit generated by different forms of advertising to show what they actually deliver to the bottom line.
According to the trade body, TV advertising accounted for 71% of total ad-generated profit made by campaigns over three years – or the equivalent of £4.20 in profit for every £1 spent.
That compared with £2.43 for print, £2.35 for online video, £2.09 for radio, £1.15 for out of home, and £0.84 for online display advertising. Taken together, advertising created total ROI over three years of £3.24 for every £1 spent.
Ebiquity and Gain Theory also found TV to be the most effective form of advertising over the short-term, which they considered to be within three to six months of a campaign finishing.
Their analysis suggested that TV was responsible for 62% of all advertising-generated profit in the short-term at an ROI of £1.73 for every £1 spent. That was followed by print (22%), radio (5%), online video (5%), out of home (3%) and online display (2%).
“The study is important because it shifts the emphasis away from the ROI number ‘arms-race’ to a more responsible approach that talks about the scalability of ROI by media channel, and the impact that this has on profit generation,” said Andrew Challier, Chief Client Officer at Ebiquity.
“This is arguably more business-relevant and almost certainly of more interest to CFOs,” he added.
Meanwhile, Matt Hill, Thinkbox’s Research and Planning Director, said: “This study by two highly respected, independent organisations with robust data at their disposal bridges the gap between the marketing and finance departments with compelling evidence that quantifies advertising’s ability to deliver shareholder value, and TV’s centrality to that.”
Sourced from Thinkbox; additional content by WARC staff